There is a time to hike interest rates, but not now

The interest rate on a savings account was about 0.4% in October last year and has dropped since.

Wed, 10 Mar 2021

Interest rates are still depressed but are well above their lows. Will borrowing rates follow? They should not, given a plethora of cheap funding at banks' feet, though banks may choose to step away from offering low five-year rates.The Reserve Bank of New Zealand still has the pedal to the metal buying bonds, offering cheap funding to banks, maintaining the official cash rate at 0.25% and dangling the possibility of the OCR going negative if needed.Covid uncertaintiesThe recovery is still contingent on considerable monetary policy sup...

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